As published in Toledo Business Journal - December 1, 2012
Sauder Manufacturing Co.’s Archbold facility
Sauder reshoring efforts
creating jobs
An effort by one area manufacturer to improve supply chain capabilities and increase profitability is having a positive impact on new job creation in the region. The effort involves finding new suppliers in close proximity to area plant operations in order to replace selected offshore suppliers.
Sauder Woodworking Company in Archbold, Ohio has been examining reshoring options for a number of years. A subsidiary, Sauder Manufacturing Co., which has plants in Archbold, and Stryker, Ohio, as well as Grabill, Indiana, has worked to realign the business’ supply chain.
“Sauder Manufacturing has been around for 65-70 years,” stated Phil Bontrager, president / CEO of the Sauder Manufacturing subsidiary. “It got started manufacturing church pews and has grown over that period of time.”
The company sells products into three distinct market segments: the worship market, acute care hospitals, and the higher education market. Its primary focus is seating products, such as lounge chairs in lobbies or seating in residence halls.
“A number of years ago, as worship styles in the North American market began to change, we realized we needed to expand our product offering beyond just church pews and wood chairs to include things like auditorium style seating like you would see in a cinema or performing arts center,” explained Bontrager. “Since our primary expertise has been in wood and auditorium seats are made from plastic, steel, and foam, we needed some engineering assistance beyond what we had in house.”
Sauder Manufacturing sought assistance from Camatic, a seating company located in Melbourne, Australia. The company installed the seating in the Sydney Opera House, as well as the Dallas Cowboys stadium, Wembley Stadium in England, and was recently awarded several hundred thousand seats at the new Olympic stadiums being constructed in Rio de Janeiro, according to Bontrager.
Sauder Manufacturing worked with Camatic to provide auditorium seating for the worship market. Sauder then began to source parts from them, some of which were manufactured in Australia and others in China. As the business grew, the company began to run into challenges.
“First, our business is a short lead time business,” explained Bontrager. “Six to eight weeks from order until installation. It was difficult to maintain a supply chain that stretched 10,000 miles with that kind of lead time because it took so much time for the parts to arrive.”
The company then began to look in the local area for suppliers to cut down its lead time. “We wanted to look locally given the automotive supplier base that is already in the area,” explained Bontrager. “Now, we source about 83% of the auditorium seating locally and the quality is significantly better than what we were experiencing. Our lead times have dropped and our cost is similar to what we were working with initially.”
One area manufacturer benefiting from Sauder Manufacturing’s reshoring efforts is Plas-Tec Corp., located in Edon, Ohio.
“We are now manufacturing three components for Sauder’s chair product. This includes a seat back, seat bottom, and a five-star base. All are injection molded components. Separately, we are also producing a set of slides on the bottom feet of a bed used in medical facilities. In addition, we are providing a set of glides and brakes for this product. This is all new business,” stated Corey Potvin, program manager, Plas-Tec.
“We have been able to handle the initial business with our current personnel and equipment. Depending on how this business grows, there is potential for adding new jobs. This new business is important to our company and Sauder Manufacturing is a valuable customer,” explained Potvin.
In addition to the impact on the company, Plas-Tec has turned to an outside supplier to manufacture the molds for the new parts. This business was placed with another company located in the region and represents additional business activity for this supplier.
Another area manufacturer now supplying Sauder Manufacturing is Moore Industries, located in Montpelier, Ohio.
“We have begun to supply parts to Sauder for one of their seating products,” stated Mike Moore, Moore Industries. “We provide substrates for their theater seating product line. These are injection molded parts. There are two different seating products and four different parts.”
Moore noted the company has been able to use its existing equipment to produce the parts.
“We did add a new machine earlier that we are using, but it was added before we got this work. We have already added one or two new jobs as a result of the new business,” he explained. “There may be possible additional employment depending on the volume of business in the future. These new revenues are important to our company.”
In addition, Alex Products in Ridgeville Corners in Henry County is also supplying Sauder Manufacturing.
“We are now manufacturing parts being used in restaurant and cafeteria chairs for Sauder Manufacturing,” stated Dave VonDeylen, president, Alex Products. “These are steel frames and they are going into taller seating products.”
He noted Alex Products has been able to support this production with existing equipment, though the new work has enabled the company to schedule employees to make the tooling needed as well as in its operations to produce the new orders.
“In addition, we have now obtained another product line that involves Sauder’s stadium seating,” VonDeylen stated. “We are manufacturing structural components for this product. We see added potential for growth in this area and other possible products that we might support. Increased employment is possible from such growth.”
VonDeylen also shared information about his own company’s purchasing activities.
“We are primarily automotive and there are times when we are told where to obtain parts and materials,” he stated. “However, when the purchasing decisions are left to us, we work to buy domestically and often in close proximity to our operations because of all the benefits we obtain by doing this.”
According to Luther Gautsche, vice president of operations, Sauder Manufacturing, being able to fix errors and have things on time was important to the company.
“We produce our orders for a specific building design,” he explained. “It’s not just an issue of being able to order a large volume container of metal standards. We consider things like the slope of the floor or the shape of the bowl of the floor. That lengthens out the supply chain, especially when the customer is asking for a short lead time. We were happy to find a company like Alex Products since they understand short cycle times.”
From its three plants, Sauder Manufacturing ships into three market segments: Sauder Worship Seating, Sauder Education, and Wieland Healthcare.
“Wieland Furniture was a company we acquired in 2000 and it had a stronger brand name in healthcare than what we did, so we maintained the integrity of the brand for the healthcare market,” stated Bontrager.
According to the company, it is exploring the idea of sourcing the remaining 17% of auditorium seating parts locally, though the cost is high.
“It involves a significant investment in tooling,” stated Bontrager. “The parts are very small and specific and the tooling can be very expensive, but if it makes sense we’re going to consider it.” The parts are currently coming from Australia and China.
Though Sauder Manufacturing is not adding any new plants in the future, it is adding additional assembly and manufacturing capacity for particular product lines where there is growth occurring or where the company is bringing new products to market that have particular requirements. On an annual basis, the company puts $1 million into new capital equipment.
“This coming year, half to three-quarters, would be to add capacity,” explained Bontrager.
“We’ve been on a lean manufacturing journey intently for six years as we continue to find ways to add more value for our customers and reduce waste. This requires some hiring. We’ve been able to increase productivity in the 17-20% range over that period, which helped us expand without significantly hiring,” stated Gautsche. “We are in that cycle where we have been doing some hiring each year for the last two years.”
Gautsche noted that the company is continuously impressed by the skill levels available in the local communities, both in its wood and upholstered furniture expertise, to relationships developed locally where skills for other trades are able to be identified.
“We’re blessed in this northwest Ohio area to have some talented people and organizations to work with,” Gautsche stated.